EUR/CHF Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by a stronger Swiss Franc and weak Eurozone data.
Key drivers:
• Rate gap: The European Central Bank remains cautious in its policy, while recent adjustments in Switzerland's monetary stance are still under speculation due to the strong CHF.
• Risk/commodities: Oil prices are currently high, which may affect the Euro negatively, as elevated energy costs could hamper economic recovery in Europe.
• One macro factor: The weak German retail sales data raises concerns about consumer demand, further pressuring the Euro amidst an uncertain economic environment.
Range: Expect EUR/CHF to drift within its recent range, lacking direction due to mixed signals from both economies.
What could change it:
• Upside risk: A strong recovery in Eurozone consumer sentiment could bolster the Euro.
• Downside risk: Continued pressure on the Euro from high energy prices and negative economic indicators could drive the rate lower.
